Willis Places Workers' Comp Cat Bond for Calif. State Fund

Willis Capital Markets & Advisory, part of insurance broker Willis Group Holdings, announced that it has structured and placed a $200 million catastrophe bond transaction for the State Compensation Insurance Fund, the largest writer of workers’ compensation business in California.

Willis says the Golden State Re Ltd. transaction is the first cat bond designed exclusively to protect a portfolio of workers’ comp exposures.

The transaction, which closed on Dec. 8, expires in early 2015. The bond provides the State Fund with $200 million of multi-year, fully collateralized protection against workers’ comp claims as a result of U.S. earthquakes.

Coverage is on a per-occurrence basis and the transaction features a modeled loss trigger which provides the State Fund with a relatively rapid payout post-event.

Tony Ursano, chief executive officer of Willis Capital Markets & Advisory says in a statement, “Our involvement in the transaction reinforces our view that there is substantial investor demand, even for minimum rate-on-line deals. We expect investors to continue to welcome well structured deals bringing them new risks and new sponsors, and we are fully equipped to sole structure and place such transactions.”

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